Failed 2005 Devas-Antrix satellite deal: Bengaluru court drops ED’s PMLA case against ex-ISRO arm executive

“In obedience of the orders of Hon’ble High Court of Karnataka, the proceedings… stand closed,” the special court said on Saturday.

A single-judge bench of the Karnataka HC had quashed the PMLA case against Sridharamurthi citing that “the lease of space segment to Devas Multimedia was on the instruction and directions of the board of directors of Antrix Corporation and special invitees” in the failed 2005 Devas-Antrix satellite deal and not a solo decision.

Sridharamurthi was among 10 individuals and entities accused of money laundering in the aftermath of the Devas Multimedia-Antrix Corporation deal of 2005, by the ED in a charge sheet filed in July 2018.

Other accused in the case are: Devas Multimedia CEO and founder Ramachandran Viswanathan, director M G Chandrashekar, Devas CTOs Desaraju Venugopal and Nataraj Dakshinamurthy, a finance director Ranganathan Mohan, and three Devas subsidiaries.

The former Antrix Corp executive director and Devas Multimedia officials were accused by the ED of diverting 85 per cent of Rs 579 crore of foreign investment it received from 2005-11 to the US following the 2005 satellite deal between Devas Multimedia and Antrix, the ISRO commercial arm.

The funds were allegedly transferred after the satellite deal was annulled in 2011 by the UPA government. Indian agencies like the ED and the CBI have alleged that the Devas-Antrix deal involved corruption on account of Devas Multimedia being created under fraudulent circumstances.

Sridharamurthi is also accused by the CBI in a corruption case over the 2005 deal. The HC has however observed that it is for the CBI to establish whether the Devas-Antrix deal of 2005 involved an act of fraud and corruption against the government of India.

The board of directors of the Antrix Corp consisted of top Indian space officials and industrialists like Ratan Tata and Jamshedji Godrej when the agreement with the founders of Devas Multimedia was approved and executed between 2004 and 2011.

Under the 2005 satellite deal with Devas, ISRO was contracted to lease two communication satellites for 12 years at a cost of Rs 167 crore to Devas Multimedia. The start-up was to provide video-audio services to mobile platforms in India using the space band or S-band spectrum transponders on ISRO’s GSAT 6 and 6A satellites built at a cost of Rs 766 crore by the space agency.

The Devas Multimedia-Antrix Corp agreement was annulled by the UPA government in February 2011 following allegations of the contract being a “sweetheart deal” in the backdrop of the 2G scam. After the NDA government came to power in 2014 the Central Bureau of Investigation (CBI) and ED began full-fledged investigations into the deal.

The ED and the CBI have filed charge sheets alleging corruption and money laundering in the matter.

Devas Multimedia and its investors — including the German telecom major Deutsche Telekom — are involved in a protracted legal battle across the world over the decision of the Government of India in 2011 to annul the deal between Devas and Antrix

Following the cancellation of the 2005 deal, Devas Multimedia and its foreign investors approached international arbitration tribunals to seek compensation for losses they incurred. Devas and its foreign investors have been awarded compensation by three arbitration tribunals over the failed deal.